Partnership firm registration is the form of business whereby the profit and losses are shared between the partners in pre-determined ratio. Partnership firm registration is often preferred by business over private limited company registration because taxation rates are generally low on partnership firm registration as compare to private limited companies. However, other aspect of registering your business as Partnership firm rather than private limited company is that the liability of the owner is unlimited in partnership as compare to private limited company where the liability of the business is limited up to the capital of the company.

Another reason for partnership registration is sometimes two or more companies decide to do a common business through sharing of resources in such case they prefer to register a partnership firm which is normally a substitute for mergers and acquisitions by the businesses.

As general practice of businesses sole proprietors when their business tends to expand need to involve other people as partners and normally businesses are turned from sole proprietor to partnership firms. Sometimes people directly register partnership firm if they want to start business with 2 to 3 or more partners.

Partnerships are registered with Registrar of Firms and each area has different registrar that is provided with the powers to issue certificate of registration of firm by the government.

For further information read Partnership Firm Registration Process in Pakistan.